Time to buy?

This question will generally garner 1 of 4 responses:

a) Yes. It is always the right time to buy in NYC. Manhattan real estate has always appreciated faster than other investments, and it always will. Don't be an idiot.

b) No. The world is collapsing and Manhattan is no exception. There are literally millions of layoffs on Wall Street, and your apartment will be worth ~2 shares of Enron stock by the end of '08. Don't be an idiot.

c) Maybe. You are too vague with your details - we need to know far more about your situation (type of apartment, location, time horizon etc.). Don't be an idiot.

d) This is the 8th time this week that someone has asked this question on a new thread. Please browse through them for your answer and stop wasting our time. Don't be an idiot.

well put

Not sure there's any reason to be obnoxious in responses since not everyone who posts here is an avid reader of the boards plus the situation is very, very fluid.

I'd say it is a good time to buy a home you are going to live in for at least five years. Manhattan is different, a country to itself in a lot of ways, though not immune from national economic events.

Right now, you'll have a lot of negotiating power and I would suggest using it to the max with price and closing costs. Though girating a bit the past few weeks, interest rates are still at historic lows. On the downside, be prepared for the possibility that prices may decline overall and in the area you buy... after you buy. You may realize that if you had just waited, you would have saved money, etc. But these things are impossible to determine, and if you are planning on being in the property for at least five years, things will start swinging up again even if there is a temporary drop.

Douchiness aside... you haven't had more leverage as a buyer in NYC since the early 90's. Whether that makes it a "good time to buy" or not is debatable. I agree with will - have a 5+ yr horizon and you should be fine.

This thread is wonderful!! All responses to the OP are right on target and valuable. The poetry and honesty of buster 2056: superb and true.
And I totally agree with stash17 and will, too.
Happy shopping!!!! I'm doing the same thing ------ and YES, the leverage makes shopping calm and a joy.

Now who is this OP? I use to know an Oppie, but I don't see an OP on the board.

Anyway, put me down for two! I love this city!

Original Poster (OP)

I think it's a fascinating time to be in a position to buy. Despite low interest rates in terms of fed funds, mortgage rates will likely be high due to other market disclocations that basically make credit scarce. So, on the one hand, that's good for buyers, because the number of buyers willing to buy due to low mortgage rates will likely be lower, so fewer overall buyers out there. Prices should adjust downward accordingly. For NYC, there's always the argument that the foreign investors counteract this (especially for condos), but if you are a foreign investor who is sophisticated enough to buy in NYC in the first place, you will also wait for a price adjustment given the conditions with respect to domestic buyers. No buyer wants to buy at a higher price than he/she has to! On the other hand, higher mortgage rates obviously mean higher financing costs. However, if you can buy a property at the right price, this can be offset with refinancing in a year or two when the market normalizes. It's like the early '90s all over again when 30 yr fixed rates were 8-9%. I am happy to pay 100-200 bps higher for a year or two in exchange for a 10-20% purchase price adjustment. I think for opportunistic buyers, time works for us...just need to be patient and ready to move when you find the right deal.

suz-- interesting points, except in the early 90s you could buy a 2bd for 300k! wouldn't it be nice to have those numbers again (for us buyers that is!)

Suz and LP1 - I'm older, been through more cycles than a Maytag. In some ways it's always a fascinating time to buy. Back when George the first was Prez, interest rates on second homes was 21.5%. I found a "had to have" house on Cape Cod, the seller accepted 10% less than asking, and I accidentally inquired if he'd finance. He held the note at 12% (imagine being happy to pay only 12% interest?) and that's the way it was. If there's a point here, I guess it's that my trip down memory lane reminds me of all the variables involved in every real estate cycle.

The next one I bought was foreclosed and empty for two years and the bank holding the note...

Oops, like stories about grandchildren, one a day is plenty.

.

I would kill to get 12% on my money today!

Dear LP1, It's 12% interest you pay! If you have a mortgage rate higher than that right now you are too stupid.

Kary, I know what cliff702 was saying. But if someone's paying 12% on their mortgage, someone's buying 12% on the other end of the deal!!!! cliff702 is talking about the times when you could get a farm bond paying 18%, or a 10Y-T at 15 3/4 ala Oct 1981.

PS Kary, before calling another member stupid, perhaps you should learn a bit about finance.

yes 300k 2 bedrooms. a monster depression, that would be great for everybody. why don't you just wish for a dirty bomb to blow up in the city.

@ buster2056

Best post ever from any thread, from any blog! Right on target, thanks for making my night a little better.

Yes. Buster2056 deserves first prize. It's zen, it's all true, it's streeteasy talk in a nutshell.

I think Buster's "don't be an idiot" admonition is not quite as zen as I would like. It's like telling me I should be taller - I would if I could. Not be an idiot - a goal or process, perhaps, but not an achievement for me yet. But for real estate, Buster sums it all up.

But I digress...

NYTimes real estate for tomorrow, "...Less Heated Market" article talks about comparatively low Manhattan inventory and gives a January figure of 5,641 apartments for sale.

If I look at the Streeteasy figure today it lists over 10,000 apartments for sale in Manhattan. And I believe that not all real estate companies list on Streeteasy, nor do owners trying to sell on their own.

Comments, please. From brokers, too.

I look forward to tomorrow's report on open houses and thank all those who take the time to write their observations.

Cliff, in addition, there are many available apartments in new developments that are not released and not counted in inventory although they should be.

In response to Cliff702:
While all listings are not found on StreetEasy such as FSBO, there are open listings where multiple brokers list the same apt as well as new develpment listings that are redundant as well as apts that have already closed. You will find a more accurate number if you click on "exclude listings already in contract" as well as "must have address" under more search options. This will give a number just under 6000.